Waiting For Prices To Fall In Florida
The Palm Beach Post reports from Florida. “The region’s once-sizzling housing market has simmered to a showdown. Some market watchers believe home prices are the object of a high-stakes tug of war. The result has been a painful slowdown with a ripple effect that has even local retailers crying foul as they see their sales dip.”
“As the song says, ‘Something’s gotta give,’ and experts are betting that sellers will blink first. And when they do, they’ll see a buyer’s market.” ‘Palm Beach County teacher Stephen Luzinski wonders why prices have not already come down more. ‘I am still waiting for prices to fall,’ said Luzinski, who’s looking to buy his first home.”
“‘It seems that most sellers are still looking to double, triple or quadruple what they paid for their house,’ he said.”
“Such seller attitudes are unlikely to last, according to real estate forecasters. Primarily because there are just too many homes on the market. Nationwide, the number of vacant unsold units in the first quarter of this year set a record, the U.S. Commerce Department said recently, continuing a sharp upward trend that started last year.”
“David Seiders, chief economist for the National Association of Home Builders, puts the number at an ‘excess of about 1.4 million.’”
“The median price of an existing single-family home in Palm Beach County fell from $388,000 in January to $375,100 in March. The number of unsold homes on the market from Boca Raton to Vero Beach has been steadily rising, surging to a record 24,028 homes for sale in March, according to Illustrated Properties Real Estate.”
“That’s a 27-month supply at the March sales pace. The same month a year ago, there were 18,178 unsold homes.”
“‘The biggest problem for single-family medium-priced homes is the beginning of this flood of foreclosures,’ Delray Beach developer Frank McKinney said.”
“‘The change from a sellers’ market to a buyer’s market is going to make for some strange bedfellows,’ said William Cozart, chief executive of the Realtors Association of the Palm Beaches. ‘A reduction in prices of somewhere between 5 percent and 10 percent will start the pendulum swinging in the right direction.’”
“That would make the median price of an existing home somewhere between $340,000 and $350,000, he said. That’s still too high for many local buyers. Hamstrung by a subprime mortgage meltdown that has forced lenders to become more stingy with credit, prospective buyers no longer can qualify for loans.”
“‘Lenders have tightened standards. I am probably losing two buyers because of it,’ West Palm Beach Realtor Randy Bianchi said. ‘We had them all set with a credit score of 702. Then it dropped to 698, and those four little points made a big difference.’”
“The financing disappeared, he said. ‘The program was no longer available to them.’ ‘Just four points,’ Bianchi said, his voice trailing off in disbelief. ‘Unbelievable.’”
“The new Marina Grande condominium seems like the dream residence for the Florida lifestyle. So why have so many Marina Grande buyers changed their minds about living there?”
“During the past year, two dozen lawsuits have been filed by buyers wanting out of contracts for about 30 units in the $200 million waterfront project.”
“Marina Grande is by no means the only Palm Beach County project losing favor with buyers. Growing numbers of home buyers have begun running to the courts exploiting any remedy to get out of pre-construction contracts on houses, townhouses and condos throughout South Florida.”
“Buyers who signed sales contracts months or even years ago expecting to flip properties for fat profits now realize they might not be able to sell into this market slump.”
“‘If the market had continued soaring, these people would have closed on their contracts, and this lawsuit never would have been filed,’ said Michael MuÒiz, a Boca Raton lawyer. MuÒiz represents Hovstone Properties Florida, which 16 buyers are suing, trying to get out of their contracts to buy at Monteverde, a Boynton Beach condominium.”
“‘What’s really changed is the market,’ said said Fort Lauderdale attorney Maurice Garcia, who represents Marina Grande. ‘Not anything else.’”
“Garcia alleges that buyers are making excuses to get out of their deals by complaining about minor changes, such as the number of parking spaces. Or the exterior color of the building.”
“Delray Beach lawyer Brian Lipshy represents 16 buyers suing Hovstone Properties. The buyers want out of the Monteverde condo because they say Hovstone has changed the deal.”
“The buyers contend that Hovstone’s decision to build only two of four planned buildings makes the project a ‘phased’ condo, in violation of contract terms. Lipshy said his clients might not have bought into the project if they knew up front that Monteverde wasn’t going to be built all at once.”
“Although court documents show that Hovstone Properties admits Monteverde is being built in stages because of sluggish sales and hurricane fears, lawyer MuÒiz said the lawsuit is nothing more than speculators trying to avoid closing on their contracts.”
“The sides have been duking it out in court for months, and the matter shows no signs of being settled. Lipshy said it’s a sign of the times: ‘I’ve filed more lawsuits in the past six months than in all my years as an attorney,’ he said.”
The Sun Sentinel. “When Denise McGill moved to Palm Beach County from rural North Carolina two years ago, she was stunned at the high cost of housing. So she found a roommate and resigned herself to renting.”
“‘In retrospect, I definitely did the right thing,’ said McGill. ‘I’m so glad I didn’t buy because I would have bought at the peak of the market.’”
“Changes at the Spring Harbor apartment complex in Delray Beach are typical of those across the region. It briefly converted to condos, only to revert back to rentals when sales didn’t meet expectations.”
“Meanwhile, developers are building more apartments. The batch of new units and a rising inventory of investor-owned rentals are providing more of a selection and easing rent increases that were so common in the past four years.”
“‘Vacancy is lost money,’ said said Susan Harding, publisher of the Boca Raton-based Southeast Florida Apartment Guide. ‘So we’re seeing a lot more concessions out there designed to get people moved in.’”
“Lenders are tightening credit standards, keeping potential homeowners in the rental pool. Others realize home prices won’t increase as fast as they have in recent years, economist Sam Chandan said.”
“‘That pressure to buy isn’t there,’ he said. ‘I think that may tip things in favor of renting.’”
“Ron Witten, owner of a Dallas-based apartment advisory firm, agrees. ‘There remains a degree of uncertainty about housing prices,’ he said. ‘And if [price] is important to you as a buyer, then waiting’s the safe way to go.’”
waiting ? my old man’s place in ft myers is off 25%
Maybe he will get off his duff and sell it when its 50% off….he has great timing on these things, ya know!
Ahh yes, good old Marina Grande. This condo tower is in perhaps the worst location in all of S. FL (although, that is certainly debatable). I would not walk the streets outside of this building with an AK47 past 9PM, I would be outgunned. If you don’t have a tank, parking your car outside of this building is akin to giving it away!
You would have to be NUTS to spend 400K for a condo in this location. You could buy the entire BLOCK next to this buidling for less then 400K. That area (I used to live on Singer Island, and would drive the BH bridge often) is more like Iraq. It is as bad as any city I have ever lived in; you would NEVER drive those streets past 9PM.
Nothing like putting 1M dollar condos across the street from the crack houses. Marina Grande is going to see huge price depreciation, the only purpose of these unit was the flip. Nobody in their right mind would actually live in that neighborhood (when they have other choices).
I can remember a time ( Early ’80’s ) when Singer Island was still OK to go to and hang out……I used to remember going down there for free concerts and beachside stuff way back then.
I loved living in the Jensen Beach / Stuart area back in the day…
Hey LP i was teaching at FIT Jensen Beach ‘73-’81. What were you doing in JB/Stu?
Going to FIT studying Ocean Tech….left in 1984..later transferred to Marshall University and got a BS in Chem.
It’s a small world.
Interesting article in today’s WSJ about Florida being the canary in the U.S. economic coal mine.
4.3% of the state’s total housing stock is vacant, the highest in the country. Building permits are down 51%, twice the nationwide decline.
“As more speculators throw in the towel, Florida housing prices may have much farther to fall.”
“Ron Witten, owner of a Dallas-based apartment advisory firm, agrees. ‘There remains a degree of uncertainty about housing prices,’ he said.”
“Softening” market, “uncertainty” in prices, puhlease. The market is “changing” to the benefit of buyers and prices are going to drop, certainly.
Where the “uncertaintly” lies however is how much will prices fall, and when and for how long?
‘And if [price] is important to you as a buyer, then waiting’s the safe way to go.’
Ahh, well Ron…since I don’t routinely fleece every human that walks the planet, price does matter.
Knock knock..Florida..HOME PRICES WILL NOT COME DOWN!!..I don’t understand why that is so hard for people to understand..Most transactions that happened in Florida were during the boom..most of the home buyers bought into the 100% Financing or took out equity lines..now those that have become sellers are understanding that in order to move to the next home they have to make SOME PROFIT on the sale of that home as that easy loan is no longer available..So to sit there and say hey home prices have got to come down ..it simply won’t because of the amount of the mortgages on these homes and the lenders who have tightened their standards..Those that could reduce because they bought before the boom and never tapped into the equity have done so and left to put their profits into homes in other states..Florida is just at the beginning of the game and will soon enough see a recesssion as well as an increase in the amount of foreclosures..
Hmm.. This is circular logic. Your saying home prices cannot come down because people cannot afford to lower the prices. That may be true, execpt that there is the thing called “comps” that work on the way down the same way that they do on the way down. Lenders simply will not lend the kind of money that they had been in the past.
Prices will come down; just because you can’t afford it does not mean that others can’t (especially banks as the foreclosures mount).
HUH?
Yes….I too was waiting for the /snark at the end of the above (otherwise) amusing comment.
I sort of understand the logic, in that many sellers have no equity to play with and no money to bring to the closing table if they were to settle for a price less than what they paid. Their only hope is for the bank to agree to a short sale. Other than that, we’re talking foreclosures and that takes a while. Also, some people, like those who sell high end “stuff” in Florida seem to think that Florida is now going to be a bunch of “Richie Riches” with a servant and slave class. In other words, so long to the middle class and don’t let the door hit ya on the way out. That may be true in some parts of Florida, like Miami, Palm Beach and parts of the Orlando area, but I got news for those who think they’re going to clean up off the Richie Riches: no one who has real money wants to live in some faux mansion pressboard box subdivision.
“…Also, some people, like those who sell high end “stuff” in Florida seem to think that Florida is now going to be a bunch of “Richie Riches” with a servant and slave class…”
Too bad the ‘nouveau riche’ forgot to pay attention to the successful ruling classes in other places/times: Rule 1: Don’t let the slave class/servant class stock up on guns…
Brenda?
this is going to be ugly……. Fire away
Sellers who can’t afford to lower their prices will be foreclosed upon in many cases.
The new lending standards mean that NEW buyers for foreclosed property can’t to pay previous prices. But the properties must be sold, even if it’s 50 cents on the dollar.
And then the only houses being sold will be foreclosed properties, all others who “can’t afford to lower their price” will be in there forever or get foreclosed upon.
…Most transactions that happened in Florida were during the boom..most of the home buyers bought into the 100% financing or took out equity lines..now those that have become sellers are understanding that in order to move to the next home they have to make SOME PROFIT on the sale of that home as that easy loan is no longer available.
Where is it written that they “have” to make some profit? You buy a house and sell it 2 years later, even in a sane market, you don’t have any right to expect profit.
“Most transactions in Florida were during the boom”….this is an open ended statement and doesn’t make a lot of sense. If the boom was about 4 years in length…I would say that MOST transactions were those occuring in the preceding 25 years. Those prior-to-the-bubble homewowners have LOTS of equity to lower prices if they need to sell and will still make out ok. What happens as boomers die and their kids just want to make a sell quickly to get their hands on the cash? They will sell at current market and be happy. Out of the sucker’s…uh errr, home buyers that bought at the top of the bubble, they will either; wait it out (assuming they are in loans they can afford), short sell, or foreclose.
prices will go down because in not so fuzz math, the average income in south florida is 50,000 and the average housing price is 375,000 and no more (funny) loans, the inventory is too high. and, they are still building. the sun-sentinel yesterday talked about “town centers” with more inventory in nearly every city in broward. that doesnt include the miami condo explosion and palm beach county western expansion. in pbc, there is talk of a 10,000 home community in the next few years. i live in west boca and people cant deal with falling housing prices. THEY WANT TO PLAY RICH BUT NOT PAY RICH.
for people to understand what is going on in south florida, you really need to see it and talk to people. i really dont see prices falling until early next year. that is when people will have to deal with lower values of their homes and a larger loan they are holding. when your house is only worth 300,000 and the loan you took out is 400,000, you are doa =(
And a lot of people bought prior to the run up, don’t have HELOCs and have plenty of equity. They will undercut their maxed out neighbors.
“And a lot of people bought prior to the run up, don’t have HELOCs and have plenty of equity. They will undercut their maxed out neighbors.”
That would be me. Pissed off the entire neighborhood I did.
Roidy
I have a friend who sold a condo 2-3 years ago at a “just get rid of it” price, because it had bad memories for her and she just didn’t want to deal with even a single counter-offer. Talk about PO’d neighbors — the agents were calling the selling agent and raising hell with her for screwing the comps. And this was during the good times.
There is a partial truth to the comment above - the amount of people who bought at the top, or who HELOC’ed at top prices is staggering.
But in order for prices to come down, it just takes one neighbor in ten to sell lower and thereby reduce the comps. All the eager buyers in the world won’t be able to get a mortgage when the banks then see that it doesn’t appraise. What will happen, then, is that those wise enough to not HELOC will get out, still with a good profit. Those who weren’t so sharp will become landlords for the next decade, or foreclose, thereby lowering the comps again.
It doesn’t take every seller’s blinking to lower comps. It just takes a small handful. Do you think there’s a handful of sellers who will be willing? I’d bet dollars to pesoes that there is.
SouthFL Renter, you are right on the money. Neighbors of my in-laws packed their bags and moved to NC about 1.5 years ago and put their house up for sale. They anticipated a quick sale at bubble prices ($449,000). This house has been on the market for 1.5 and finally it was sold for 350,000. This is in a neighborhood where everyone bragged that they were living in 1/2 million dollar homes.
All I can say is - wow.
By the same principle - in mid-1929 most stock had been purchase at really high prices, thus those who bought could not afford to sell at a loss. Did this keep prices propped up?
DJIA Sep 3, 1929: 381.17
DJIA Jul 8, 1932: 41.22
Doesn’t look like it.
Your “theory” is totally without logic outside of the recession comment. It’s all about money (and has ALWAYS been) about money. The majority of speculators have NOT moved on. The majority (as always) got caught when the market turned and are attempting to hold on, hoping the market will go back up and they can either (A) Get out with their original investment capital or, (B) Feel smart because they didn’t bite the bullet and sell at a loss.
Be it stocks or property or gold or any other boom and bust market, most “speculators” get in too late. The old advice that says if everyone knows there’s a lot of money to be made in some area or other, then it’s already too late because the smart money, who got in early, have already sold. The tech boom and every other boom and bust in history proved that. The pool of “smart money” is VERY small. The pool of Johhny- Come-Lately” dumb money” is very large.
I personally know of a couple who bought 2 properties in California (Palm Springs) in mid-2005 and are now stuck. Their original home, which cost them $350,000 in the late 80’s, went thru the roof in the boom to $1.2 million so they sucked money out to buy speculator properties in Palm Springs. It’s called greed. They could have sold several months ago at a break-even price or small loss but expressed to me that, “This is just temporary. Once spring arrives the market will go back up.” It didn’t and it will NOT go back up for several years ONCE the bottom (a long way off) is reached. However, still living in a dream world, they are now re-financing (as I suspect many speculators are in Florida) their over-valued ORIGINAL home, which still has plenty of equity, to keep their Palm Springs speculator properties above water.
Of course, the “comps” are the important thing to watch. The selling “at any price” deluge has not yet started because, as Schiller has stated, it seems that these boom and bust situations are driven by mass psychology and events turn on a dime. Once the REAL selling starts, perhaps with a recession, the “comps” will reflect the lower prices and each sale (unless there are a lot of GF’s) will push the prices down as more and more Johhny-Come-Lately speculators realize things really have changed.
Finally, it all comes down to one VERY simple fact. Affordability. #1. Would be buyers making $15 - $20 an hour at their jobs cannot pay for $300,000 + properties PLUS all the other expenses such as insurance and taxes and repairs which go along with ownership. As we all know, if it wasn’t for the exotic loan madness, the majority of people who bought would still be living in the world of sanity in rental property instead of the would of McMansion make believe. #2. Those who are trying to stay above water with their speculator properties, will finally realize they have to sell because their assets are sinking lower and lower.
However, there is even a more sinister fact lurking in the background. Inventory. What we are seeing are builders building even more property in an already over-saturated market. To me, that’s akin to putting more wood on a wild fire hoping it will smother the flames.
On the topic of inventory, take a look at these charts in Palm Beach County: http://tinyurl.com/29q4xj
I think what is happening in Florida is similar to the story of the driver who sets out on a journey to Eldorado with a full tank of gas. He has been made to believe that the town is only 200 miles away and that once he gets there he can collect as much gold and silver as he wants. Midway through the journey he sees a sign that reads “Eldorado 200 miles.” He thinks its a mistake and he keeps going. After 200 miles he sees another sign saying “Eldorado 200 miles.” He realises he is almost out of gas and knows that there are no gas stations in the wilderness. He can’t go back because he will be stranded and die of thirst. Suddenly he bursts into a song: “Eldorado or bust.”
Although Mike’s comment is chock-full of good information, it all can be distilled down to the old adage that it’s greed and fear that drive every market. Greed is rampant in the upside of every bubble, and causes prices to overshoot rational levels. And, of course, when the market turns, fear will propel it down to firesale prices.
The idea that real estate is something ’special’ is nonsense, especially since it ignores basic human nature. With people, fear and greed trump everything, including the nesting instinct.
Very well put, mike. And you mentioned the word “recession.” Bears are saying that the first quarter GDP, which was an anemic 1.3 will be downgraded. Hello recession. That may act as a trigger for acceleration of the housing bust, not to mention a stock market crash.
Brenda? Brenda? Is that you?
lol
holy crap I should have scrolled down first before I posted way up there
Brenda could eclipse Suzanne as our favorite target of abuse.
“..now those that have become sellers are understanding that in order to move to the next home they have to make SOME PROFIT on the sale of that home as that easy loan is no longer available…”
You’re assuming they are moving into another home. Some of them are being foreclosed. Others who are moving into new homes can afford to carry two mortgages less than they can afford to drop the price on the home they’re selling.
You certainly have a point there, but there are no more buyers paying those ridiculous prices either. The banks are certainly not lining up to throw good money after bad real estate. The only way out for many owners is called SHORT SALE or FORECLOSURE. Those that can afford making payments probably won’t sell, for the others the problem will work itself out “naturally”.
Fine by me. If prices do stay up (which I doubt) that’ll only make it that much easier to convince my husband to leave FL for a more stable environment. If not for him I’d have hightailed it out of here two years ago.
ARM resets force sales.
Nah Ron.
We don’t care about price. Its an insignificant, pissant little detail.
All we care about is “Howmuchamonth??”
Also, we want the Happy Talk to come back….you know “Buy Now Or Be Priced Out Forever”…and that 10% appreciation YOY is “in the bag” !!!….or “We’ll refi you out of this ARM in a couple of years and everything will be OK !!!”
Please bring the Happy Times back.:)
“We’ll refi you out of this ARM in a couple of years and everything will be OK !!!”
I heard this from everyone - You just need to get on the ladder … I’ve made a fortune in the past 5 years you just need to get in before it is too late …
So where would I be today if I had purchased a $600K box in
San Diego in 2004-2005?
Hmmm, right about now I would be sweating a $4500 / MO PITI and wondering how I ever got into such a god awful mess.
In that event, you sure wouldn’t be spending much time on THIS particular blog, I’m guessing, unless you were a glutton for punishment.
On a related note, it would be fun to hear some more actual “there but for the grace of God” stories from folks who almost pulled the trigger on a purchase in the last couple years, but didn’t, and are glad as heck.
Good idea. I found Ben’s blog in Spring ‘05. In the eight months before, I made offers on two houses and a condo. Two were refused outright and the third became a bidding war so I walked. So happy. So very, very happy that I didn’t get any of them.
“‘Lenders have tightened standards. I am probably losing two buyers because of it,’ West Palm Beach Realtor Randy Bianchi said. ‘We had them all set with a credit score of 702. Then it dropped to 698, and those four little points made a big difference.’”
“The financing disappeared, he said. ‘The program was no longer available to them.’ ‘Just four points,’ Bianchi said, his voice trailing off in disbelief. ‘Unbelievable.’”
This is obviously a stated income or Alt-A no ratio type of deal. If they were able to show their income, going from 702 to 698 wouldn’t make any difference. There was a article a few days ago which hit on this point, that credit scores aren’t as inidicative of credit risk as they used to be. Maybe this realtor should find homes that these buyers could actually afford and he wouldn’t be in disbelief.
I think the reason credit scoring is not working any more, is the uncharted territory we find ourselves in with regards to income verification. I can remember getting my first Visa card back in the early 80’s and they called to verify employment, needed me to send paystubs and finally ended up granting me a starter credit line of $500 after all that.
These days no one checks up on anything.
Thank you for that. I had to show over 18 months of continuous professional employment to get the credit card I wanted (USAA) in the late 80’s. Things have changed so much, I was wondering if I had imagined it.
Credit score is a joke sometimes. If you check different banks to get pre-approved so you get the best rate, you can hurt your credit score. Each time a bank accesses your credit, your score drops. So it’s really not indicative of how credit worthy you are. Instead it sends up a red flag that you are having trouble and are trying to find different places to access credit.
I am sure he would sell them a shack if he could but we are talking PBC here. 90% of the folks there cannot afford the median home!
A crummy 698 fico score verses an excellent 702?
Similiar to the value of a diamond…
a 98 point diamond is worth much less than a 1.02 carat diamond.
As luck would have it, both items are tremendously overvalued, anyway.
I agree. Four points isn’t the deal breaker. There’s more to that story.
I looked at one lender that would most likely have financed this potential transaction. 700 is the min credit score for a no ratio or stated income 100% LTV. If the borrower was able to make a 5% downpayment, they could get the loan. 698 means the borrower, gasp!, has to put money into the transaction. Bad enough they don’t have the capacity to repay the loan, the least they can do is put some skin in the game.
Prices are down, not enough yet, but all you have to do is drive around and see the reduced signs all over the place. Anyone who says otherwise needs to change their meds.
“Prices are down, not enough yet”
Agreed. The only people who ARE selling are those who’ve taken their 2003 pill and put the price there. If the house was $500K in 2005 it needs to be marketed at $329,900 to even get bites.
I suppose that I am merely illiterate. But I have yet to find a zip code in PBC in which there aren’t pretty significant drops already. By “significant”, I mean 10% plus.
What am I missing?
You are correct however there were 5 YEARS of double digit home appreciation there. So it will take somewhere around an average of 30% cut from the peak to move the market again.
“What am I missing?”
The ability to mask 10% drops in REIC-produced real estate price statistics.
“The ability to mask 10% drops in REIC-produced real estate price statistics.”
They like to use median price. If I’m in the market for a $350,000 house I get to buy a much bigger $350,000 house than a year ago.
Spot on. And it will be “fixed up” much more than last year’s $350,000 fixer-upper, as sellers will go to much greater lengths to make their home stand out against many competitors. Any level of expense to market a home seems preferred to dropping the list price to a level where the home will sell…
they are going down on the street, but the media hasnt and wont tell you. open up the paper every saturday and just look. the fact is prices went up so high, the edge of the cliff will make you dizzy!
OT but how about the depreciation schedule of the last few years
-= big boost
1st year 50% is still on,but probably will get yanked soon
“1st year 50% is still on”
Please splain what this means.
“Changes at the Spring Harbor apartment complex in Delray Beach are typical of those across the region. It briefly converted to condos, only to revert back to rentals when sales didn’t meet expectations.”
I live close to this place. I heard that they didn’t sell ANY. My neighbor looked at some when they first came on the market, to rent out. At their asking prices there was no way to even get close to break-even. Thing is, I think whoever bought the whole complex paid a fortune for it, over $200K/unit, before they fixed it up hoping to sell it as condos. They must be losing big money every month renting it as apartments.
This past weekend I was in a new neighborhood in Fort Myers. There were 7 model homes to tour. My sister-in -law had just bought a new home there and was showing me around. We were the only ones touring the models on a
Saturday morning, it was very strange. later that day I walked around the neighborhood and noticed so many vacant homes, my guess ,at least 50. The developer has not built the club house, pool and fitness center, looks like a complete disaster. Until you see it with your own eyes, you can’t believe it.
The Florida real estate market is so hot this year, one could almost say it’s “on fire.” Small wonder, with a bad drought and an arson motive (thanks to so many underwater homedebtors)…
With the heightened fire risk this year in FL and CA bubble zones, the housing bust could soon take on biblical proportions.
———————————————————————————
U.S. News
Florida firefighters nervous on pivotal day
POSTED: 11:01 a.m. EDT, May 14, 2007
…
More than 200 fires are burning in Florida, scorching nearly 200,000 acres, the Florida Division of Forestry said. More than half that destruction has come from the Bugaboo Fire. In Georgia, a section of the Bugaboo Fire dubbed the Bugaboo Scrub Fire — has burned more than 130,000 acres, said Kris Eriksen, manager of the joint information center.
http://www.cnn.com/2007/US/05/14/wildfires/
One little-discussed negative consequence of the bubble: Increased pressure to build homes in the past- and future- path of natural hazards. Of course, environmental wackos say the risk is worth it to preserve their precious open space…
—————————————————————————-
May 14, 2007
Homes in fire-prone areas
Open spaces worth the risk, residents say
BY SUSANNE CERVENKA
FLORIDA TODAY
(Pain still burns. Kathy Goodrich’s eyes well up with tears as she holds photos of her family’s home on Bluebill Road in Mims after it was destroyed by a wildfire in 1998. Craig Rubadoux, FLORIDA TODAY)
Kathy Goodrich cries when she sees news reports of families losing homes to wildfires. Not too long ago, that was her.
“Every time I hear it, it’s, oh God, it brings it all back,” said the 49-year-old, lifelong Mims resident, whose rural Bluebill Road home was wiped away by the 1998 fires. “I know exactly how that feels.”
For Goodrich and much of Brevard County, where thousands of houses nestle among thick trees and underbrush, the wildfire threat literally hits home.
http://www.floridatoday.com/apps/pbcs.dll/article?AID=/20070514/NEWS01/705140329
Of course, environmental wackos say the risk is worth it to preserve their precious open space…
Your BS is getting tiresome. Naturally hazardous areas, such as fire-prone growth and flood plains, are precisely the places which environmental “wackos” want to preserve as open space and not be covered with houses.
Seeing how good you are at digging up stories, how about an actual quote from these “wackos” supporting your claim? And all your other BS claims about what people whom you don’t like are supposedly saying. Put up or shut up.
OT wow, the chrysler deal should give folks an insight into where lots of these leveraged buyouts will end up
70% + loss no boom or bust just slow scking sound
Sucking sound = inflation taxation of anyone with fiat-currency-denominated savings (esp. retirees on fixed-payment private pensions and anyone with money in $US-denominated savings accounts)
Maybe I’m missing something in the terminology, but I for one would not consider the number of parking spaces for a condo a “minor change”.
I hope the flippers take it up the @$$.
It goes against them now they do not want the condos?
Yabbut remember how many people - flippers and otherwise - were getting screwed over by the builders negating their purchase contracts during the boom. It didn’t matter that folks had signed purchase contracts for properties when the builders wanted to resell those properties at new, higher prices. The builders had no compunctions against telling people who’d signed a purchase contract, “Sorry, null and void.”
A pox on all their houses.
Amazing. And yet, this conversation occurred between me and a Pulte salesman in the summer of ‘05.
PS: “Our prises are this high because everyone wants to move here”(central FL)
PS five minutes later: ‘The down payment is $36,000, unless you finance it with Pulte. Then it’s $10,000.’
Me: “Why the huge difference?”
PS. “The extra money is for damages.”
Me: “What kind of damages?”
PS (belligerently): “Punitive.”
Me: “Punishment for what?”
PS: “In case a buyer walks out on a deal, so we don’t get screwed.”
Me: “Ummm, you just said that everyone wants to live in this area.”
PS: “Take it or leave it.”
I derive a lot of satisfaction from the idea of flippers and developers suing each other.
Got 20% downpayment?
20% downpayment requirement would settle our affordability problem very quickly.
greedy lenders and investors and dopey borrowers need to feel the pain.
I think that would be a great one-shot solution, though it is nearly impossible that it would come to pass. Even in the “old days,” it was pretty easy to get 90% financing with PMI, though PMI may be pretty hard to get on loans with no documentation of ability to repay. As to your main point, in think that ANY increase in down payment requirements — skin in the game — will result in a more than proportional improvement in prices — pushing them down.
Yeah, but how else do lenders protect themselves in an environment of quickly declining prices? I think DP’s will be making a huge comeback, since the only alternative is not making loans at all. Everything still comes down to risk/reward.
Looks like banks are starting to offload at a loss… here’s one in Valrico, FL (near Tampa) that I found today:
http://tinyurl.com/2en6gv
List price went from $315K to $269K in less that 2 weeks.
It was last purchased for $192K http://tinyurl.com/2u9f8s, but the buyer refied the heckout of it.
It foreclosed on March 20 of this year with a total principal balance owed of $299,733.86, with the total judgement being for $326,081.20 http://tinyurl.com/2lk5xc
http://www.ewm.com/trendx/ Re Broward County home sales for April 2007.
“Some market watchers believe home prices are the object of a high-stakes tug of war.”
“Tug of war” implies everyone can just get tired and drop the rope and shake hands if they get tired of pulling on each other…there is no stored energy in a tug of war with a non-stretchy rope. This is more like plate tectonics, and the pressure is building. All the FBs being underwater just means that there is no way to relieve the pressure other than the inevitable earthquake. Imagine a tug of war with a giant rubber band that’s stretched almost to the breaking point. It’s all fun and games until somebody loses an eye…
It’s amazing how for 5 years all anyone talked about was how housing was the only thing keeping the economy afloat, but now that housing is in the toilet the analysts are trying to convince people that it won’t be that big a drag on the economy. You can’t have it both ways. If you take the credit going up you need to take the hit coming down.